An example of an activity that creates a positive consumption externality is
a) locating beehives next to an orange orchard
b) a noisy party
c) smoking, which harms the health of a bystander
d) a flu vaccination
Ans: d) a flu vaccination
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A depository institution receives deposits from lenders and makes loans to borrowers
Indicate whether the statement is true or false
An economy's production function is Y = A , and the economy's total output in equilibrium is $700 billion. Total labor income in this economy is ________
A) $300 billion B) $233.3 billion C) $210 billion D) $400 billion E) none of the above
The rule of 70 estimates how long it will take a country to double its real GDP per capita by:
A. dividing the average growth rate by 70. B. dividing 70 by the average growth rate. C. dividing the current real GDP per capita by 70. D. multiplying the average growth rate by 70 percent.
The primary benefit of a monetary system of exchange compared to a barter system is the increased
A. ability to record transactions. B. time necessary to find trading partners. C. time devoted to shopping. D. efficiency in arranging transactions.